Metals Not Pricing in QE Like Stocks Are

Although U.S. stocks suffered their third straight down day on Tuesday, ?A primary driver of support for stocks in recent months,? writes Eric Parnell, ?is the hope that the U.S. Federal Reserve will intervene with yet another round of quantitative easing (QE)?.But if we were truly on the brink of receiving another round of QE from the Fed, both gold and silver would be performing quite differently from how they are now.?

He goes on to argue that without imminent QE, ?stocks are set up for disappointment and the risks are to the downside. Sure they may rally if the Fed actually provides QE3, but the potential is far greater for a sharp correction if stocks do not get the stimulus they so crave. However, gold and silver are set up for surprise with risks to the upside. Gold and silver remain sluggish, but suppose the Fed actually delivers more QE in the end. Given that both precious metals are not pricing such a move in at present, this implies the potential for an explosive move to the upside under such an outcome.

Better yet for the precious metals, if global markets instead descend into crisis, both gold and silver offer far greater appeal given their ability to rally as a safe haven whereas stocks are likely to be thrown out indiscriminately under such a scenario. For these reasons, I remain long gold and silver.?

Related Links:

Reuters:? Gold flat but fears over euro zone, Greece support; silver off 0.4%

Trader Dan/Jesse?s Caf? Am?ricain:? Precious metals succumbing to deflationary forces today; Gold continues coiling

Zero Hedge: Wall Street Journal?s Hilsenrath once again with the 3:55 pm stick save

BullionVault/P. Radomski:? Gold in euros ?making gains? on stronger dollar; Currencies still seem to smother gold and other precious metals

Got Gold Report/Vancouver Sun:? Currency confidence puncture accelerating for euro and USD; Eurozone has few options left, all of them bad

Bullion Bulls Canada/KWN:? Central bank gold-grab intensifies; John Embry ? Expect shortages of gold as soon as next month

Mineweb:? Commodities bull Rick Mills particularly likes prospects for gold, silver and uranium;

Commodity HQ/Reuters:? Time to buy silver?; Time to pour into gold?

The Daily Gold:? Anatomy of a future gold & silver bubble

KWN/SafeHaven:? It?s absolutely shocking how much gold China is acquiring; China continues to buy strategic assets

Yahoo! Finance:? China?s ?Race for resources?: Economist & author Dambisa Moyo sees commodity conflicts and scarcity ahead

Gold Switzerland:? Gold goes where the money is

Market Oracle/JS Kim:? Defining ?intrinsic value? in gold and silver investing; The one personality trait that all gold & silver investors need to be profitable

Resource Investor/Dollar Collapse:? How ETFs line Wall Street pockets ? while picking yours; Still think that money market fund is ?cash??

This entry was posted on Tuesday, July 24th, 2012 at 9:17 pm and is filed under Bailout, China, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, Wall Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Source: http://silverandgoldcoinblog.com/2012/07/24/gold-silver-not-pricing-in-qe-like-stocks/

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